Ethiopia presents a complex financial crime risk environment shaped by ongoing internal conflicts, weak institutional capacity, and economic vulnerabilities. While the country has made some progress in establishing anti-money laundering frameworks, enforcement remains severely constrained by resource limitations, political instability, and competing priorities.

The ongoing conflict in Tigray has created significant governance gaps, with large areas effectively outside central government control. These conditions are ripe for various forms of illicit activity, from arms trafficking to labour exploitation to humanitarian aid diversion. The country’s position in the Horn of Africa also makes it a natural transit point for trafficking operations between the Middle East, Asia, and other African countries.